Development Classification
Today, countries across the globe can be divided into groupings according to their development stages. These are:
- Developed Countries - the most highly developed countries with the population experiencing high living standards
- Developing Countries - countries that are at a lower stage of development.
- Least Developed Countries (LDCs) - countries with very low living standards, low life expectancy, high infant mortality rate and low levels of education.
- Newly Industrialised Countries (NICs) - countries that have begun to develop through industrialisation in the last 40-50 years. Some of these countries may be referred to as developed countries depending on their GDP, GNP and HDI.
- Recently Industrialised Countries (RICs) - countries that have only just started to develop through industrialisation.
- Centrally Planned Economies - communist countries where state or government make all economic decisions.
- Oil-rich Countries - these have a high GNP per capita, although wealth may be concentrated in the hands of few people. Without oil, these countries would probably fall into the developing group.
Figure below shows a map of the world with economic groupings. It also includes the Brandt line which shows the North and South divide in development.
- Developed Countries - the most highly developed countries with the population experiencing high living standards
- Developing Countries - countries that are at a lower stage of development.
- Least Developed Countries (LDCs) - countries with very low living standards, low life expectancy, high infant mortality rate and low levels of education.
- Newly Industrialised Countries (NICs) - countries that have begun to develop through industrialisation in the last 40-50 years. Some of these countries may be referred to as developed countries depending on their GDP, GNP and HDI.
- Recently Industrialised Countries (RICs) - countries that have only just started to develop through industrialisation.
- Centrally Planned Economies - communist countries where state or government make all economic decisions.
- Oil-rich Countries - these have a high GNP per capita, although wealth may be concentrated in the hands of few people. Without oil, these countries would probably fall into the developing group.
Figure below shows a map of the world with economic groupings. It also includes the Brandt line which shows the North and South divide in development.
As countries develop, they can be classified as different groupings, however, the transitions are gradual with no abrupt points in change. Different countries are at various stages of development and are developing in different ways and rates, therefore, it is referred as the development continuum.
Developed CountriesDeveloped country, also known as 'advanced country', 'More Developed Country (MDC)' or 'More Economically Developed Country (MEDC)' have high GDP and tends to be ranked high in the HDI. The tertiary and quaternary sectors of industry dominates in developed countries. The United States, Japan and the United kingdom are examples of developed countries. They have post-industrial economies and are in the top ten largest advanced economies in the world (2015).
In particular, the United States have the largest economy in the world with GDP of 17.4 trillion US$ and GDP per capita of over 54.6 thousand US$ (International Monetary Fund 2014). They have very high living standards and are also ranked 5th in HDI with the value 0.914. Developing CountriesDeveloping country, also known as 'underdeveloped country', 'Less Developed Country (LDC)' or 'Less Economically Developed Country' have lower life expectancy, less education and less money compared to Developed Countries. A significant degree of industrialisation relative to their population has not been achieved and the standards of living are medium to low. Argentina, Egypt and Poland may be considered as developing countries (International Monetary Fund 2015).
The GDP of Egypt is 286 billion US$ and GDP per capita of 10.9 thousand US$ (International Monetary Fund 2014). They have medium human development and are ranked 110th in the HDI with the value 0.682. Least Developed CountriesLeast Developed Country have the lowest socioeconomic development and have the lowest HDI ratings of all countries in the world. These countries suffer from poverty, lack of human resources (water, food, medical/ healthcare, education) and economic vulnerability. A number of sub-Saharan African countries, few Asian countries and some small island nations are in this category. Niger, Bangladesh and Haiti are considered as Least Developed Countries (United Nations).
Niger has a GDP of just over 8 billion US$ (2014) and GDP per capita of 1 thousand US$ (2013). It was ranked last on the HDI with the value of 0.337 in 2013. Economic activity centres on subsistence agriculture and export of raw minerals. Niger faces challenges to development due to its geographical location, desert terrain and overpopulation. Population have very low standards of life, poor education and lack of infrastructure and healthcare. |
Newly Industrialised CountriesNICs have not yet reached developed country status but have outpaced their developing counterparts. NICs are countries that are undergoing rapid economic growth usually with industrialisation being the key factor. The term NIC was introduced in 1970s when rapid industrial growth were experienced by Hong Kong, Singapore, South Korea and Taiwan since 1960s with the help of globalisation. They were known as the 'Four Asian Tigers' although today all four countries are considered as developed countries. Malaysia, Thailand and Brazil are considered as current NICs and have middle to high HDI rating.
The economy of Malaysia is the third largest in Southeast Asia after undergoing a rapid development during the late 20th century. The economic boom occurred from industry sector, agriculture sector, natural resources and external trade. The GDP of Malaysia is 327 billion US$ and GDP per capita of 24.6 thousand US$. Living standards are quite high with HDI of 0.773, ranked 62nd in the world. Recently Industrialised CountriesRICs go through the same path as NICs, however, they are countries that have only recently industrialised or just starting to industrialise. Mexico, Chile, China and India may be considered as RICs. Except for China and India, they tend to have lower economy compared to NICs. China and India may be referred as third phase NICs.
Centrally Planned EconomiesCentrally Planned Economies assume that the market does not work in the best interest of the people and that in order for social and national objectives to be met a central authority needs to make decisions. Communist nations such as North Korea have centrally planned system.
In North Korea the role of market allocation scheme is limited. As it is a communist country, it is difficult to estimate the GDP due to the lack of economic data and that the North Korean currency is nonconvertible. GDP was estimated to be around 40 billion US$. Oil-rich CountriesOil-rich countries have high GNP per capita due to their natural resource. They are considered as World Bank high-income economies and could be referred to as developed countries too. Saudi Arabia and United Arab Emirates (UAE) are examples of Oil-rich countries.
As of 2012 Saudi Arabia produce 9.9 million barrels of crude oil per day and is the 2nd highest producer of oil in the world. Their GDP is 752 billion US$ and GDP per capita is 52 thousand US$. They are ranked 34th in the HDI with 0.836. |
More details about NICs/ RICs development and case studies in the Globalisation section, The Asian Tigers section and China & India section.